Thursday, June 28, 2012

How I Learned to Stop Worrying and Love the Supreme Court Ruling

Like every last one of you, I was caught off guard today by Chief Justice John Roberts swing vote that upheld the individual mandate. This was the linchpin of President Barack Obama's health care legislation and as such, there was a lot on the line.

I realize I'm supposed to be upset about this result, but to be honest, I think Roberts makes a strong argument that the financial punishment given to people who do not buy health insurance is a form of taxation.

Don't hold your breath waiting for Obama supporters to update their lists of tax increases the president is responsible for, of course. I expect the president and his supporters to pull an explanation-free 180 and say yes, this was a tax the entire time before quickly changing the subject.

I also expect Obama critics to say he broke another campaign promise by bringing tax increases to the middle class. I expect they will say this a lot, even if they personally disagree that it was a tax.

I hear naysayers claiming that it was wrong for the Supreme Court to introduce the taxation justification when defenders never argued that point. I think those people would be right if they were judging a high school debate team, but this is a major Supreme Court ruling and the resulting legal precedents shouldn't be constrained by the competence of the lawyers it hears.

Count me among the legion of people who are glad that the ruling not only failed to uphold that vague and limitless interpretation of the dreaded Commerce Clause, but also set a precedent limiting it. I was prepared to write about how that bogus justification for unconstitutional laws has been an ongoing farce, but that angle has been covered by scores of bloggers already.

I do worry, however, that punitive taxes may become the new Commerce Clause. What's to stop congress from putting a tax on homeowners who refuse to house soldiers during peacetime, or large taxes on guns or abortions?

Constitutionality aside, we may have dodged a major bullet here. In a 2009 post about my healthcare wish list items I wrote in regards to pre-existing contions:

This is the big riddle in health insurance. Poor people who already have a health problem can't get coverage for something they already have, but simply forcing health insurance to cover these costs would drive up costs. Just like letting people buy car insurance after an accident, covering pre-existing conditions would discourage people from buying insurance. That defeats the entire idea of insurance. One solution is forcing everyone to buy health insurance, but that didn't work very well in Massachusetts. I don't know the solution to this problem.
While I've never liked the individual mandate solution, adverse selection is a very real problem and with the president's ignorance on insurance issues, there's a big change he would have gone ahead with his health care legislation anyway, only with the individual mandate neatly cut out.

If Obama critics turn out to be right and this ruling will create more problems then it solves, those troubles will fall short of the absolute disaster that would have followed if insurance companies were forced to cover ailments after they've occured.

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